The New Mexican: Testimony Continues in PNM Rate Case

Utility rate cases are a big numbers game, and Public Service Company of New Mexico’s request before the Public Regulation Commission to raise electricity rates on a half-million customers is no different.

PNM proposes a 10.8 percent increase to base electricity rates. For a customer using 600 kilowatt hours in a month, the increase would amount to about $6.32.

The company also seeks a one-time $20 million recovery of capital improvement costs that would appear as a monthly $1.54 charge only during 2013.

But other fees already listed on customers’ bills to pay for energy-efficiency programs, renewable-energy projects and the cost of fuel also will go up in the next couple of years.

Taken as a whole, the charges mean the average PNM customer could see bills increase by about 18 percent, from $67 a month to $78 a month.

Witnesses already had filled five days with testimony before a Public Regulation Commission hearing officer by Friday. Three more witnesses are scheduled to give testimony, and the hearing could wrap up as early as Tuesday.

PNM’s numbers were a lot different last fall. The company originally asked for a rate hike that totaled $165 million in additional revenue, or a 21 percent bump in the average customer’s bills. Renewable-energy and consumer advocates and the state Attorney General’s Office protested the hike. PNM ultimately agreed in February to ask for a base rate increase of 10.8 percent for a total of $85 million in new revenue. PNM also agreed to reduce the increase or limit fees charged to customers for energy-efficiency, renewable-energy programs, cost-of-fuel recovery and the PNM Good Neighbor Fund.

PNM has said rate and fee increases are needed to upgrade infrastructure, pay for new renewable-energy projects such as 22 megawatts of solar photovoltaic projects under construction, and cover other rising costs.

Western Resource Advocates and Citizens for Clean, Affordable Energy oppose the agreement. They will ask the PRC hearing examiner and the commissioners to reject the agreement and the rate case or modify it, said Steven Michel, attorney with Western Resource Advocates.

They want to see two primary changes.

First, they think PNM should adjust the base rate to reward lower energy consumers. “PNM is proposing an across-the-board increase for most residential customers,” Michel said. “What we’ve said is this is not the way to collect these rates. We think the largest users should pay the highest rates.”

Western Resource Advocates next week will propose a rate design in which customers who use more than 1,000 kilowatt hours a month would pay the largest share of a rate increase. Customers using from 300 up to 1,000 kilowatt hours would pay less than the 10.8 percent.

Michel said his group also opposes the February agreement because it would allow PNM to depreciate the decades-old San Juan Generating Station for another 40 years.

After testimony concludes next week, the hearing examiner will review all the evidence and make a recommendation on the rate case to the commissioners. The PRC can accept the rate case and agreement as they are, reject them outright or ask the parties to modify them.